Bank of Vance v. Crowder

Adams, J. Tbe action is prosecuted by tbe plaintiff for tbe purpose of impressing a trust, for its benefit as receiver, upon tbe town lot described in tbe deed from Gholson to Mrs. Crowder. Tbe equitable doctrine upon which tbe relief is sought is not questioned. If E. B. Crowder held tbe proceeds of tbe discounted note as a trustee for tbe Farmers and Merchants Bank a trust resulted by operation of law for tbe benefit of tbe bank and under tbe doctrine of implied trusts tbe fund could be followed into any property into which it was converted or invested unless affected by tbe rights of a bona fide purchaser for value, without notice. If, on tbe other band, be discounted tbe note with fraudulent intent be was a trustee ex maleficio, and against bis fraud a court of equity would afford relief. “In such cases,” says Bispham, “tbe interference of courts of equity is called into play by fraud as a distinct bead of jurisdiction; and tbe complainant’s right to relief is based upon tbat ground, tbe defendant being treated as a trustee merely for tbe purpose of working out tbe equity of tbe complainant.” Principles of Equity, 149. In Massey v. Alston, 173 N. C., 215, it is said: “A court of equity is not bound to wrest tbe property *315 from tbe wrongdoer by a rescission, but may mould its decree to tbe particular and controlling equity of tbe case and tbe real and substantial rights of tbe parties. . . . Equity makes use of tbe machinery of a trust for tbe purpose of affording redress in cases of fraud, and will follow tbe property obtained by a fraud in order to remedy tbe wrong, and only stops tbe pursuit when tbe means of ascertainment fails or tbe rights of bona fide purchasers for value, without notice of tbe fraud or trust, have intervened.” Campbell v. Drake, 39 N. C., 94; Edwards v. Culberson, 111 N. C., 342; Mfg. Co. v. Summers, 143 N. C., 102; Bank v. Waggoner, 185 N. C., 297. While not contesting this equitable doctrine, tbe defendants say that Mrs. Crowder was an innocent purchaser of tbe property for value, without notice of any fraud or trust. It was some time after she bad endorsed and delivered to her husband tbe check for $2,500 that she first beard of bis alleged malfeasance. Indeed, bis Honor plainly told tbe jury that there was neither allegation nor contention that she knew her husband bad misappropriated tbe bank’s money by investing it in her land. He gave tbe additional instruction that in no view of tbe law could Mrs. Crowder be an innocent purchaser for value “so far as tbe $2,500 is concerned”; tbat according to ber admission ber busband bad paid $2,500 as a part of tbe price of tbe land, and tbat in contemplation of law tbe payment was a gift. Their relation raised tbe presumption of a gift pro tanto when be purchased tbe land and bad tbe title conveyed to bis wife; but this is a presumption of fact which is not conclusive, but rebuttable. Arrington v. Arrington, 114 N. C., 116; Sherrod v. Dixon, 120 N. C., 60; Evans v. Cullens, 122 N. C., 55; Singleton v. Cherry, 168 N. C., 402; Nelson v. Nelson, 176 N. C., 191; Anderson v. Anderson, 177 N. C., 401; Tire Co. v. Lester, 190 N. C., 411, 416. Tbe instruction complained of was evidently given upon tbe principle tbat there was no evidence to rebut tbe presumption tbat tbe money was a gift. Though tbe testimony upon which tbe defendants rely as tending to repel tbe presumption of a gift was not full or comprehensive, we cannot bold as a matter of law tbat it should not have been submitted to tbe jury. Mrs. Crowder testified: “I have seen this check for $2,500 before; it was given to me to pay on tbe Southerland Stables, by my father, Melville Dorsey. I endorsed tbe check and gave it to Mr. E. B. Crowder to pay $2,500 on tbe Southerland Stables. At tbe time tbe lot was bought in November, 1922, my father paid $3,000 on tbe purchase price, and this was to pay tbe balance of $2,500 to complete tbe $5,500 purchase price. I was to return to E. B. Crowder tbe $2,500 tbat be bad paid on tbe property at tbe time it was purchased.” *316 And her father said: “The reason I did not furnish the entire $5,500 at that time instead of only $3,000 was because I could not do it . . . I paid for it in the final. . . . The reason I did not pay for it earlier was because I had a very sick daughter in the hospital, and was under a great deal of expense, and had my taxes to pay for two years, and it was using all of the ready money I had, and as soon as I found out that I had money ahead, I paid it. The reason I was paying this was for it to be my daughter’s separate estate.” In our opinion this testimony, together with other circumstances, is some evidence that it was understood between the parties that the money advanced by R. B. Crowder should be treated as a loan and not as a gift. For this reason there must be a New trial.